Monday, February 11, 2013

Union autoworker rescues Brazil's economy

Luiz Inácio Lula da Silva ("Lula") is a former union autoworker who became president of Brazil from 2003-11. His politics of prosperity (the opposite of austerity) created 15 million jobs and lifted 23 million people out of poverty.

He is one of the most popular politicians in the world. Wikipedia tells us:

As of the 21st century, Lula is considered by most of the center, center-left and left-wing politicians and intellectuals from Brazil as one of the greatest Brazilian presidents of all time, a par only with Getúlio Vargas.

Lula grew up poor and dropped out of school after the fourth grade. At 19, he got a job as a press operator in an auto parts family and lost his little finger in an accident. Several hospitals refused him treatment, an experience that deepened his involvement in the Workers' Union. Lula rose through the union ranks and in 1975 was elected president of the Steel Workers' Union of São Bernardo do Campo and Diadema. During the late '70s he led a series of strikes, and was imprisoned by Brazil's military dictators.

UAW President Bob King writes in this week's Detroit News "Labor Voices" column:

Lula's prosperity economic policies increased the growth rate in Brazil from 1.6 percent to more than 7 percent. Unemployment dropped from 11 percent to 5.3 percent and Brazil created 15 million new jobs while he was president. The minimum wage rose by 67 percent; he initiated a program to provide direct help for poor mothers, greatly reducing poverty and hunger.

Brazil withstood the global economic crisis better than almost any other nation by tightly regulating banks and rejecting the policy of austerity. Lula also rejected privatization of government services and instead invested $250 billion in Brazil's infrastructure so its economy could expand further and faster.

Most importantly, Lula directly attacked Brazil's inequality. Before he took office, Brazil had the fourth worst gap in the world between rich and poor. Once his policies had time to work, incomes of the poorest 10 percent of the population grew at nearly double the rate of the richest 10 percent. Lula's example shows what can happen in a country where workers' voices are clearly heard in the political process.

Prosperity politics worked in Brazil. Austerity politics didn't work in Europe.